How to Negotiate Freelance Rates Without Apologizing

To negotiate freelance rates without apologizing, work out your floor rate before the conversation, state your price plainly, and when a client pushes back, change the scope, timeline or payment terms instead of cutting your rate. Find out what's behind the objection (a fixed budget, a cheaper quote, or approval rules) and offer options the client can choose between. If the client won't pay at least your floor for the work, it's fine to walk away.

Know Your Floor Before You Talk

Your floor is the lowest hourly rate at which the work still covers the income you need and your business costs. Work it out from:

• The income you need before tax in a year
• Your business costs in a year: software, equipment, insurance and so on
• Your billable hours: the hours you can actually invoice, after time off, sales and admin

Floor rate = (income needed + business costs) ÷ billable hours. The hourly rate calculator does this with your own numbers and can add a tax set-aside. For more on setting the rate itself, see how to set freelance rates.

Check your past projects too: divide each fee by all the hours it took, including meetings, revisions and admin. If you don't track time, start, so you know your real hourly rate.

State Your Price Plainly

Give the price, say what it includes, and stop. Don't add a discount before the client has responded. If the client asks how you got there, explain the scope and the deliverables, not your personal costs.

Find Out What's Behind the Objection

When a client says the price is too high, ask what's driving it:

• A fixed budget: reduce or phase the scope to fit.
• A cheaper quote from someone else: ask what that quote includes and explain the difference in scope, timeline or revisions.
• An approval rule or procurement process: ask what they need from you, such as a breakdown by phase.

Trade Scope, Not Rate

If you lower the price, change something material:

• Fewer revision rounds
• Fewer deliverables, or a later phase for some of them
• A longer timeline
• More of the work done by the client, such as supplying content

A straight discount for the same work lowers your hourly rate, and the next negotiation starts from the lower number.

Offer Options

Give the client two or three versions of the work at different prices, such as a core package and an extended one. The client chooses the scope that fits the budget, and each option is priced at your rate. For pricing approaches, see freelance pricing strategies.

Negotiate Payment Terms Too

Terms can matter as much as the fee:

• A deposit before you start, especially with a new client
• Payment by milestone rather than one invoice at the end
• A shorter payment window

Billed's invoice software page says you can "Set a due date on each invoice so your client knows when to pay." See invoice payment terms.

Sample Rate Calculation and Counteroffer

These are sample figures for a fictional freelance designer.

Step 1: the floor rate

• Income needed before tax: $70,000.00 a year
• Business costs: $8,000.00 a year
• Billable hours: 46 working weeks × 25 billable hours = 1,150 hours
• Floor rate: ($70,000.00 + $8,000.00) ÷ 1,150 = $78,000.00 ÷ 1,150 = $67.83 an hour

Step 2: the quote

• The project is estimated at 80 hours at the designer's rate of $75.00: 80 × $75.00 = $6,000.00

Step 3: the client's counteroffer of $5,000.00

• Accepting $5,000.00 for the same 80 hours: $5,000.00 ÷ 80 = $62.50 an hour, below the $67.83 floor.
• Instead, the designer drops one revision round and one deliverable, which removes 14 hours: 80 − 14 = 66 hours × $75.00 = $4,950.00, still at $75.00 an hour.

The client gets a price under the $5,000.00 budget, and the designer keeps the rate.

When to Walk Away

Consider declining when the client wants unlimited revisions for a fixed fee, won't agree to a written scope, or won't pay at least your floor for the work. A polite "That's below what I can do this work for, but I'm happy to quote a smaller scope" leaves the door open.

After You Agree

Put the scope, price, timeline, revisions and payment terms in writing before you start. See freelance contract essentials and how to handle scope creep. Billed's time tracking page says you can "Log the time you and your team spend on tasks and projects", which gives you the hours for checking your real rate on the next negotiation.

Related Guides

• How to set freelance rates
• Freelance pricing strategies
• How to build freelance retainer clients
• How to manage freelance finances
• How to handle scope creep
• Hourly rate calculator

FAQ

How do you negotiate freelance rates without losing the client?

State your price, ask what's behind any objection, and offer to change the scope, timeline or payment terms instead of cutting your rate. Options at different scopes let the client choose a price that fits the budget.

What should I say when a client says my rate is too high?

Ask what their budget is and which parts of the work matter to them, then offer a smaller scope or a phased plan at the same rate. In the sample on this page, dropping one revision round and one deliverable brings a $6,000.00 quote to $4,950.00 without lowering the $75.00 hourly rate.

How do I work out my minimum freelance rate?

Add the income you need before tax to your annual business costs, then divide by the hours you can bill in a year. In the sample on this page, $78,000.00 divided by 1,150 billable hours gives a floor of $67.83 an hour.

When is a good time to raise freelance rates?

At natural points such as a new project, a contract renewal or the start of a new year. Tell existing clients in advance, in writing, and use the new rate on new proposals.